Decision on wheat Import-tax deferred until September
A recent government decision to defer import-tax decision on wheat would bring respite to domestic wheat producers. A source close to the development avers that the finance ministry in consultation with food, farm and other trade ministries may finalize a decision by September
A recent government decision to defer import-tax decision on wheat would bring respite to domestic wheat producers. A source close to the development avers that the finance ministry in consultation with food, farm and other trade ministries may finalize a decision by September. India is among the world’s largest wheat producer after China, and cheap wheat imports have been hurting domestic suppliers. In spite being a strong wheat producer, India has continually observed imports from Australia, France and Russia. The government decision to impose 10% import-tax on wheat, a rabi crop (cultivatable only once a year) came in August 2015, after 8 years which was again increased to 25% in October. The Oct levied tax shall expire this March, but the government is likely to extend it till September end. This is being done to protect the farmers from cheap wheat imports. The extended tax could be reviewed by the PM and his ministers in June when they will have a clear idea about the size of this year’s wheat crops. The FCI (Food Corporation of India), the nodal agency to stock food, had a stock of 40 million tonnes despite production-drop to 90.78 million tonnes in 2014-15 from a record 95.85 million tonnes in the 2013-14. Though FCI’s facilities were replete with domestic wheat, poor stocking conditions meant that these were unusable. Flour mills and traders, hence imported high-quality grains on lower prices, which additionally created a challenge in supply-demand. Trade pundits averred that it was wise importing wheat at Rs. 16/kg (landing price) from Australia as against Rs 17-18/kg for purchasing and transporting wheat to a distance of 1,800 km.
March 23, 2016 | 01:15pm IST
to success.